Chapter 7. Summary

Power brokers have spread the Western property rights system, aristocratic exclusive title to nature’s resources and technologies, far and wide. Recognizing the power and wealth this system accrues to them, regional puppets worldwide owning the greater share of their nation’s wealth will be hard to displace; and the imperial centers’ mighty militaries are in place to protect it all. So the odds are greatest the world will continue battling over the world’s resources rather than choose the path of peace and prosperity. But this short reality list demonstrates that the current ongoing populist revolution may lead to a peaceful and prosperous world:

1 Full fledged ballot-box revolutions after both WWI and WWII, that would have eliminated Western property rights laws put in place the past 700-plus years, were far closer than our history books acknowledge. In both cases all of Europe was almost lost.1 With the loss of its core, the unequal property rights monopoly system, the primary cause of most wars, would have disappeared worldwide, including in America.

2 Above and beyond the supporting rationales, the primary purpose of those two world wars was to prevent Germany from taking over England’s markets. If that were to happen, Britain’s empire would have quickly collapsed and that would have either collapsed the monopoly system or placed Germany at the helm.

3 A hidden reason, and the real purpose of WWII, was to take out the Soviet Union whose economic successes, starting from one of the poorest and most inhospitable regions on earth, also spelled doom for the monopoly system. Forget the massive propaganda keeping these successes from the consciousness of the world. The world could not be kept under control so long as that successful example was there for the world to see.

The Rudolf Hess saga assures us a secret agreement had been reached to take out that threat. Knowing France and England would enter the fray and dictate the peace as they were defeating the Soviet Union, Germany, through conquering all nations between her and the Atlantic Ocean, took care of her back door first. Germany then flew their second in command, Rudolf Hess, to Britain to get the original agreement back on track, only this time it would be on their terms.a She then attacked the Soviet Union.

But there was no way Britain could shift the beliefs of her people from Germany as an enemy to an ally in so short a time, the historic three-way struggle for control of Europe by competing capital and labor, German capital against British entrenched capital and labor represented by the emerging Soviet federation, became intense. The struggles between centers of capital is well understood, the struggles of labor for freedom and full and equal rights is buried history.

America’s embargo of Japan’s oil and steel was expected to shut that economy down in 60 days, which led to Pearl Harbor. America joined the battle on both fronts and the rest is history. A part of that scenario is not what is recorded in history but lets be realistic, that is what happened. Hess finished his life out in Spandau prison permitted only to see his family under guard with instructions that only family matters could be discussed.

4 Though few realize it, the 45 years of the Cold War was specifically to suppress the post WWII revolutions within Europe and around the world. These were only continuations of the almost successful post WWI ballot box revolutions throughout Europe addressed above, those struggles of labor in which the real reasons were conveniently left out of history books.2

5 Oil producing nations quickly figured out America’s current invasion of Iraq was only the first step in controlling oil throughout the Middle East and Central Asia so as to control the rest of the world through control of their oil supplies. Those weak oil-supplying nations are contracting (lightly allying) with Russia, China, and India to offset that threat. The U.S. simultaneously establishing AFRICOM to build 24 military bases in Africa to offset China signing 50 cooperation agreements and their 800 firms doing business on that continent. The cover story was to help with education, health, economic growth, and democracy.

The undeveloped world also figured out that the slogans of peace, freedom, justice, rights, and majority rule were covers for suppressing their freedom and rights. The option of developing a few nations under the above slogans as allies against the remaining periphery nations is no longer viable. The cover story being tried, bringing democracy to the world, is believed by almost no one. That imperialist democracies are really puppet governments while true democracies have been subverted and overthrown for the past 60 years is well understood. Imperialists are trapped as certified free elections replace those puppet governments with honest ones. Imperialist control of puppet governments is now so well understood that even countries where external control of elections were once blatant—Venezuela, Haiti, Bolivia, Nicaragua, and Chile for example—have thrown aside those puppets by the ballot. As the War on Terror worldwide is against them and they are fully aware of the above deceptions,b the Muslim world interprets that war as being against their religion. Thus, for each Muslim killed in this “war on terror” several more take their place. As all this unfolds, enough citizenry within the imperial nations will understand that America and their allies are obviously operating an empire and more home support will be lost.

6 Fully 60% of the industrial capacity of the world is now outside the borders of Europe and America. This is the same trade and political structure which led to WWI and WWII and this crisis for the imperial centers will be many times greater.

As the world’s historic leaders in automobile production radically cut back production, China announced she will soon be selling cars on the world market at 60% the price of other manufactures. Currently brand names are produced in China and marketed by Western traders at huge profit margins. China is busy developing brand names for all products. With an already hollowed out industrial economy, the profit structure within those wealthy nations will collapse as those brands, one by one, hit Western markets and the wealth is retained by China’s traders, not those of America, Europe, and Japan.c The current, late 2007-08, crisis in world markets may herald that moment.

As the huge profits currently earned by American traders are taken over by Chinese traders, Ford Auto Company and other historic brand name auto manufacturers are having serious problems. China and other alert lower-paid nations where those products are produced will be banking the profits of capital, the wages of labor, and those huge trader profits. The current account deficits of the historic imperial nations will increase in step with foreign traders replacing domestic traders.

7 Fast developing Southeast Asia may settle for equality but, whether America and Europe like it or not, and even though they do not want a confrontation with the developed world or to see Western economies collapse, such social crises cause wars, they will not settle for second place.

8 As their enormous wealth and military might is based upon theft of the wealth of weak nations, and assuming America does not use its nuclear weapons to maintain its current fascist control of resources throughout the world, long before Southeast Asia reaches 50% equality the economies of America and Europe will collapse.

9 All the world’s major banking systems know the day of reckoning will come. Various countries are getting out of the dollar and into other currencies. Girding to fight that battle, America’s Federal Reserve quietly noted they would no longer release statistics on how much money they are printing.3 The citizenry will not be alerted that massive money is being created to buy their own bonds (search for Plunge Protection Team) and that the battle of the titans has begun. Seeing the writing on the wall, half the presidents of America’s regional Federal Reserve banks have resigned.

10 The imperial rulers of the world are totally out of sync with its citizenry who are restive and demanding their reasonable share of the world’s wealth. The populist uprising is picking up momentum, the communication systems are in place to sustain that revolt, and, sooner or later if the world’s leaders do not wake up and run this world responsibly, the imperial nations will not be able to contain that revolution. Under the tutelage of President Hugo Chavez of Venezuela, South America is considering following the lead of the European Union and tying their nations closer together. There is a difference between aristocracy denying the common people rights for centuries leading to the French Revolution and financial aristocracy today denying the citizenry worldwide their reasonable share of the world’s wealth, modern communications outside the control of the imperial centers will permit a large share of the world to revolt simultaneously.

11 And, as there is plenty on this earth for all if it were shared equally instead of fought over and wasting 50% of those resources and labor in the process, these battles over control of the wealth producing process are unnecessary.

So rational choices are only two:

1 Powerful nations give up their selfish ways, operate responsibly, and share the wealth of the world relatively equally.

2 Or this world is shattered and made largely uninhabitable by a 3rd World War using nuclear weapons.

Another two possibilities may avoid a world war but they are so morally repugnant and unlikely, we will not even consider them:

3 The current fast developing nations will come to an agreement with the old imperial nations that together they will control the world and share the wealth. Africa, South America, parts of Asia, and the Muslim world, targeted to be outside that circle of wealthy nations, will never accept that and laying down their tools, sabotaging resource extraction and infrastructure, roadside bombs, and suicide bombers will grind the world economy to a halt.

4 Fascist-control of periphery nations and their resources by imperial nations through puppet governments is how periphery nations have been controlled ever since WWII. That system is falling apart as we speak and, though habituated powerbrokers may try, we do not believe that approach is worth considering.

If the current alliance of America, Europe and Israel use nuclear weapons on Iran and other recalcitrant nations, as they are threatening to do as we go to press, that could be a preview of WWIII. For that to succeed all other nations must agree to a far lower share of the wealth than that consumed by Europe and America and we do not believe other nuclear armed nations will accept that. It would also mean Africa, South America, and the Muslim world will have to accept their resources providing a large share of that wealth and they receiving almost none. We do not believe that will be accepted either.

The world’s corrupt and selfish rulers must be replaced by others with vision and responsibility. As the crisis in Iraq deepens (late 2007-08), the pouring in of more troops may turn the tide but it is much more likely to destroy the Bush presidency and hasten the day the world fully breaks free.d

The list and comments above are very conservative. In Nemesis: The Last Days of the American Republic Chalmers Johnson addresses the same problems in much more depth and detail. He says Americans are so dependent upon the military as a Keynesian infusion into the economy that they can never reduce it let alone get rid of it. But he goes far beyond that and, for all the reasons laid out above and more, he sees no way that America can survive. We disagree by pointing out that, once the collapse occurs and assuming war is avoided, America and all other nations can restructure to full and equal rights for all and survive superbly well with a quality life for all the world’s citizens.

We feel if we are in error it will only be one of timing. There is the possibility fascist control of impoverished nations could go on for another generation. There is the possibility that battles over the world’s resources will go on forever. We think both those scenarios are unlikely. It will be either peace with sharing of the world’s resources or it will be nuclear WWIII and we chose to assume the first of those possibilities, the world restructuring to peace with a quality life for all.

If peace does come to this world it will be because historic powerbrokers are faced by equal power, the current leaders are pushed aside by democratic forces, and new leaders agree to equitably share the wealth. Ever since WWII, only the alliance of developed nations, the ones imposing those unequal trades, has had that choice. The unallied impoverished world has had no choices. If they are ever to rise out of poverty they must ally together and force the imperial nations and fast developing nations to include them in the wealth-producing, wealth-sharing, process. Once allied, their power, control of most the world’s resources, will equal the nuclear armed imperial world. No combination of military power can offset half the world laying down their tools and fighting back with industrial sabotage, suicide bombs, car bombs, and roadside bombs.

Having been appropriating the wealth of periphery nations under various cover stories for centuries—they are not really people, then they have no souls, then they are not capable, and new rationales keep being created—the West refuses to bite the bullet and restructure to honest, truly productive, societies. But they may have to: Sprinkled throughout these concluding pages are other signs that a severe crisis for the wealthy world is brewing. All the ASEAN countries, Indonesia, Thailand, Malaysia, Singapore, Philippines, Brunei, Vietnam, Laos, Myanmar and Cambodia, plus Japan, China, India, South Korea, Australia, and New Zealand, representing half, three billion of the world’s people, met in Malaysia, December 2005, for the inaugural of the East Asian Summit (EAS). That America was not invited is significant. Interest quickened at the April 10, 2006 meeting of the South Asian Association for Regional Cooperation (SAARC) and Russia, China, and the Central Asian nations forming the Shanghai Cooperation Organization (SCO) to offset US-NATO moves to control the oil of Central Asia further weakened Western nations. Noting all that, the U.S. immediately established AFRICOM with the intention to establish 24 military bases in Africa to head off ongoing alliances with those countries.

With Evo Morales’s election as president of Bolivia, 80% of the population of South America has a progressive government fully aware that American foreign policies are designed to maintain access to their resources below fair value, and that this and a refusal to share technology and markets is the cause of their poverty. On Democracy Now TV, John Perkins, author of Confessions of an Economic Hit Man, discussed an “EHM,” Economic Hit Man, walking into President Morales’s office and failing to entrap Bolivia into their system of unpayable debts. An EHM has already struck a deal with Paraguay but, if Brazil, Venezuela, and Bolivia make a better offer, Paraguay as a base to destabilize those allying across South America may fall apart.

President Hugo Chavez of Venezuela has just declared his country as fully literate and is forming trading alliances which promise to free many more countries in a shorter span of time than Simon Bolivar almost freed in his lifetime. His offer of cheaper oil to key members of South America’s Mercosur alliance—Brazil, Argentina, Uruguay, Paraguay and Associate Members Chile, Ecuador, Columbia, and Peru—and his funding of Telesur-Al-Bolivar satellite TV, radio, and phone coverage for Latin America and the world, plus the elections of more populist governments is turning that long-standing free trade alliance into an affiliation for economic freedom comparable to the East Asian Summit.

Those alliances have the tools to thwart America’s imperialist ambitions. Within weeks of its November 2005 startup, Telesur was expanded. Named after Simon Bolivar and engineered by China, it has brought the Arabic station Al Jazeera and others on board to expand to the entire world in various languages and that is planned to be operational by this year (2008).

That breathtaking advance towards full freedom is as catching as a cold. Other stations will not only be broadcasting on the Bolivar satellite, many will be broadcasting worldwide in English. Other nations and cultures will follow suit. The three billion people represented in that East Asian Summit, Central and Western Asia, and others in Africa will broadcast their views of current and past history to the world. Russia, currently limited to Europe and North America, will be speaking to the world. With the views of the world’s dispossessed broadly disseminated, corporate media within the West must address the world more broadly and accurately or be irrelevant. Recordings of current events and history will then have a closer relationship to reality.

What can greater relevance to reality accomplish? President Chavez is so popular that the opposition, backed by America, dropped so low in the polls they withdrew from the 2005 elections and all South America and beyond is poised for a Bolivarian Revolution overthrowing unequal trade agreements. This gives insight into how fast a movement for freedom and rights can spread when unique world events provide that opening. The international havoc of America’s disastrous foreign policies, an extension of European colonialism, totally discrediting the U.S. in the eyes of the world and costing the U.S the moral high ground, is just such an opening and the developing world now has the communication facilities to inform their citizenry of the wealthy world’s many methods of denying impoverished nations their share of the world’s wealth. All people want to be free and understanding how their impoverishment has been imposed by imperial nations destroys that imperial control.

Policies of imperial nations have been, and still are, to keep periphery nations individualized and marginalized. Only by they coming together in a firm alliance, a federation, and educating their citizenry on the importance of coalition and cooperation, can freedom with full and equal rights be attained. Japan, China, India, and Russia already are signing mutually-lucrative, mutually-protective, trade deals with forming alliances across the undeveloped world. That, and the likelihood of an Asian and a South American trading currency, the early stages of federation, has Western managers of state in a panic.

As they should be: President Chavez has moved Venezuela’s reserves to Europe, traded dollars for Euros, and is suggesting just such a central bank for Latin America. Iran and Syria have moved their reserves to a safer haven and all Muslim countries are considering that move. China announced it is diversifying its reserves which is now well over $1 trillion and rising. With the Chinese signing trade agreements with the East African Community, Kenya, Tanzania, and Uganda, CEDEAO, The Economic Community of West African States and the African Union, that continent is stirring. With the examples of the European Union, the East Asia Summit, and South American alliances, they too will be forming trading alliances with regional currencies.

Those alliances, the early stage of federation, creating their own trading currencies and signing trade-development agreements with rising centers of capital, will effectively offset the IMF-World Bank- GATT- NAFTA- WTO- MAI-GATS-FTAA-CAFTA-military cartel designed by America to retain control of the world’s resources and the wealth producing process.

Europe, North America, Australia, Japan, China, India, Russia, Taiwan, South Korea, Indonesia, Malaysia, Brazil, Argentina, Venezuela, etc, over half the population on earth, will soon be modernized and the other half of the world, those with the resources necessary to keep the world’s industries running, has plans for their own industrialization.

Let’s face that reality: Under what strategy will a technologically developed China, India, Japan, or Russia be the most prosperous, with America and Europe as their primary trading partners or by sharing technology with Africa, South America, and Central Eurasia in trade for resources? Obviously, measured in consumer products and services provided their citizenry, they would be much wealthier under the second option than the first. Under that first option their massive accumulations of dollar reserves would become valueless in either an inflationary spiral or an economic crash. America would cite security needs and quickly pass laws to prevent others’ reserves from buying up their properties. In the second option, those nations—plus Malaysia, Indonesia, and the substantial industry already in Brazil, Argentina, etc—have enough technology to rapidly develop the remaining poor nations.

A nation can industrialize only with the support of an already developed country or region. Japan’s success in the late 19th and early 20th centuries based on empire ended with their defeat by more powerful empires in WWII. The struggle between the British and German empires over control of world trade led to WWI and WWII. To prevent defeat and the shattering of property rights laws as designed, primarily by Britain, over the past 700-plus years, required pulling America into both wars. Those holocausts taught Western empires that they had nothing to gain by fighting each other, NATO and the European Union evolved out of that realization. Occasional surface disagreements notwithstanding, the historic empires of Europe and America have been an allied empire every since.

The propaganda notwithstanding, the Soviet Union was not an empire; 15 individual nations quickly and peacefully federated after WWI. Openly declaring they would live off their own resources, they released title to all natural wealth outside their federation and took title to all within their borders.

Another legal structure not appropriating the wealth of either internal labor or that of other nations was a serious threat to empires whose property rights laws were designed to appropriate the wealth of both internal labor and the periphery of empire. The expenditure of 85% of Germany’s firepower against the Soviets, and they still winning, was the primary reason for post WWII Cold War alliances such as NATO. Not only was it crucial to contain Soviet property rights laws, the colonial world’s break for freedom also had to be suppressed. Though the cost in lives and treasure, both within the imperial centers and on that periphery, were enormous, those suppressions were, until this latest worldwide populist revolution, successful.

But that expensive success—it cost trillions of dollars, plus 12 to 15 million lives, and impoverished billions—was only temporary. As shown by periphery nations refusing for four years to sign the unequal trade agreements presented at the Doha round of the WTO, by the forming of trading alliances throughout the periphery as addressed above, by the old Soviet alliances partially reforming, and by the East Asian Summit—together representing fully 70% of the world’s people—the periphery’s breaks for freedom again threatens Western property rights laws. As already addressed—unless Western powerbrokers are delusional—financial, economic, covert, and overt warfare will have continual diminishing returns. Our analysis will proceed on the assumption that this reality will hold.

Utilizing financial and economic power (threat of sanctions) the Western world is trying to sign unequal trade contracts with individual nations within the developing world with success in some places and failures in many. But, if challenged, those contracts signed under duress will not stand. Unequal contracts imposed by deceit or force are not recognized in any Western court. Those unequal agreements imposed by financial, economic, diplomatic, covert, and overt warfare can be quickly set aside and, as various countries of South America and around the world are renegotiating their resource extraction contracts as we speak, that process is already in motion.

That motion will turn into a biblical flood once the impoverished world realizes they can effectively reclaim control of their resources through collecting the rental values on nature’s wealth and technologies and using that huge flow of money to build infrastructure and industry.

International law prevents reclaiming title to resources without compensation. But applying Henry George’s foundation principle that society should collect the rental values on nature’s wealth and technologies reclaims that stolen wealth without the need to compensate the thieves. Corporations retain title to that natural wealth but all they can earn is fair compensation for their labor and capital. The unearned wealth, rental income from nature’s wealth, goes to the proper owners of that land, its people.

Agreements of the latest WTO Doha round leaves the wealthy nations’ subsidies, and the poorer nations’ denial of the right to subsidize, in place. Recognizing that the 30 OECD (Organization for Economic Cooperation & Development) nations’ $350 billion per year agriculture subsidies permitted imports to undersell India’s farmers, before Trade Minister Kamal Nath left for the December 2005 WTO negotiations he said, “importing food is as good as importing unemployment” and he could sign a trade agreement on the terms offered only if the U.S. is “willing to provide a visa to every farmer displaced as a consequence of the import of cheaper and highly subsidized food.” Minister Nath appears to have failed to keep that promise but the struggle continues.

When first developing, periphery nations need both money and industry. Assuming those alliances included one of, or all of, the three Asian centers of capital, they would have adequate capacity for rapidly developing the 50% of the world that has little industry. Normally it would take many years for a fully allied, federated, South America and another federation of Africa to form. But these are not normal times. Those industrialized nations need the resources of the developing world just as badly as those poor nations need technology and an efficient economic infrastructure and the only way those poorer nations will be fully paid for their resources is by allying together and demanding that price.

The flow of money is a super efficient accounting system and that flow is a mirror image of a modern economy. We just looked into that mirror and saw that well over 50% of the current flows of money were wasted efforts.

The heart of the monopoly system is exclusive title to nature’s resources and technologies and this includes social technologies. Proof that this is monopoly capitalism rather than honest capitalism is proven by economic efficiency doubling when those exclusive titles are restructured to conditional titles as we did theoretically in the above chapters.

All are morally entitled to their share of nature’s wealth and that can be attained only through eliminating those monopolies we are taught do not exist. Once eliminated, the costs of government—national, state, and local—are paid from resource rents and profits from a socially-owned banking system. Any necessary increase in the money supply is covered by building infrastructure with socially-created money. Essential services—water systems, sewers, roads, railroads, WiFi communications, etc—can be debt free. The money to be created is determined by that needed for a stable and adequate money supply which can be further balanced through increasing or decreasing required reserves. The costs of infrastructure, health care, and even retirement should be covered by socially collected resource rents and banking profits. Under those conditions—along with equal pay for equally-productive labor, rights to a productive job, and the elimination of taxes—the wealth of nature is distributed relatively equally even as employed labor hours necessary for a quality lifestyle drops to two to three days per week.

Monopolies claim a large share of the wealth produced; waste enormous amounts of resources, capital, and labor; restrict the efficiencies of an economy, claim unearned wealth, and all while roughly doubling the cost of production. The social efficiency gains claimed, 50%, are so enormous that we will be challenged. But the truth is, if technology had been shared—both internally and in world trade—rather than monopolized, the entire world would have developed in step with those efficiency gains and there would have been little poverty and few wars. With all societies utilizing the latest technologies, the pace of inventions would have quickened. War and poverty would have been the exception rather than the rule over the past 300 years.

Western societies evolved from aristocracy. Titles to nature’s resources and technologies today are little more than aristocratic property rights. Aristocracy fought for centuries to protect those exclusive rights and today’s battles, both worldwide and within internal economies, are a continuation of those struggles. Full and equal rights for any great numbers have never been attained and we outline herein how, through utilizing the mighty economic and financial engines of Henry George’s inclusive property rights laws, they can be attained for all.

Add up the waste within America’s internal economy as herein addressed, add in that wasted and destroyed worldwide by war the past 60 years, add in the GDP for a respected living standard for roughly five billion impoverished people who could be enjoying a quality life today except for monopoly capitalism’s last fifty years of covert warfare—a struggle led by America for the purpose of controlling resources, controlling the wealth producing process, and imposing their system of property rights (exclusive title to nature’s resources and technologies) on the world which prevented their economies from developing—and you arrive at how much more wealth has been effectively destroyed or production forgone as opposed to how much wealth America produces. That honest look highlights America as a negative producer, consuming, wasting and destroying more wealth than she produces.

Henry George’s concept of full and equal rights through restructuring exclusive titles to nature’s resources and technologies to conditional titles is applicable across the full economic spectrum. That simple change in property rights eliminates both the unacknowledged primary monopolies—land, technology, money, and communication, and the secondary monopolies that are the essence of today’s American economy. The appropriated values capitalized into huge blocs of capital are transposed into relatively equally-shared use values.

All trained in classical and neoliberal economics will say, “Those appropriated blocs of capital owned by individuals were, and are, necessary to finance an economy.” They will claim that “governments are inefficient allocators of financial and industrial capital.” Both claims are unequivocally untrue. Financing is not needed to build land, nature built it. A large amount of financing is not needed to start up a bank. The only labor-created value there, beyond a small amount in brick and mortar, is a piece of paper, its license. Yes a private bank requires a minimum level of startup funds but a socially-owned banking system simply creates that money. That rule holds; an efficient banking system has no labor-produced values to be owned beyond brick and mortar.

A part of the values of today’s technology are created by labor but currently the greatest share of those values are pieces of paper, monopoly patents. Communications need financing but there too finance capital is primarily buying and selling the enormous capitalized values of monopolized spectrums and patents and both are a part of nature. Financing is needed for roads, railroads, water systems, sewer systems, post offices, electric systems, and communications. But in the early to middle stages of federated regional development those can be built with socially-created money. In the very early stages, even industry can be built with created money. In a crisis, as demonstrated below, such money can be pointed directly to any distressed sector of the economy, natural or manmade. For example: If America owned and operated its banking system, socially-created money could be pointed towards alleviating any natural disaster and those whose lives were shattered could be quickly made whole. These principles, keeping control local through full and equal rights established in law as addressed in these concluding pages, will prove this.

Current capitalism monopolizes all wealth offered free by nature and charges a rental value which must be paid by true producers. Those annual privately collected rents, improperly called earnings, are appropriated values which are then capitalized 10 to 30 times. Though most finance capital has been in existence for a long time, on balance money must be created to finance sales of newly-created monopoly values. Stage one of money creation under monopoly capitalism: 1) Capitalized values are created first then the money is created to buy and sell those values. That is investing in monopolization instead of production. Stage two: 2) That created money circulates and, as savings in reserve deposits, is available to loan to create more wealth.

The reason finance capital is so hard to obtain under the errors of monopoly capitalism is that those monopoly values and the 60% of America’s finance capital that funds those unearned values reverses the proper order of money and wealth creation. Henry George’s inclusive property rights laws correct that. In the early stages of development, stage one: 1) Money is socially created to fund infrastructure (debt free) and industry (privately owned thus bonded) and the circulation of that money operates the economy. Stage two: 2) As development progresses, money is socially-created to fund only infrastructure (debt free) while savings within the circulation of money funds private industrial development along with housing and other consumer needs. The developed stage: 3) Once created, money stays in existence until destroyed, bankruptcy for example. Once a region is developed, money is created only when it is needed to expand the economy. In an efficient economy with full and equal rights for all, at no time are monopoly values bought and sold. Instead of financing monopoly-created values, touchable and useable use values are financed, created, and bought and sold, both planning and financial control are now primarily regional and local.

Private industries and services serving consumer needs are properly financed out of savings, reserve deposits. We are proposing a constitutional right to finance capital for federated regions of the world, countries, regions within countries, states, local communities and entrepreneurs. Individual financing is much simpler under full and equal rights than under the false values of equity-backed loans of monopoly capitalism. Needs can be calculated and allotted relatively easily and loans would more on merit and less on equity.e

The exposure of wasted labor, capital, and resources and the roughly doubling of economic efficiency when those monopolies are eliminated prove the wealth appropriated through private collection of rental values on what is freely offered by nature is both unearned and unnecessary. The infrastructure operating monopoly systems and collecting those rental values are today’s pyramids. They waste resources, capital, and labor and lower economic efficiency. The efficiency gains of technology are so enormous that, even though massive wealth is produced, under monopoly capitalism much is wasted and an equal amount that would have been produced under an efficient economic structure is not even realized. That this waste is unknown is due to the centuries of justifications by the economic classics that these systems of theft were efficient economies.

Walk into the heart of any city, look up at those huge skyscrapers, walk in, look at the plaques on the doors, and—when one understands monopolies intercepting, as opposed to producing, wealth—one realizes this is the superstructure of a wealth interception system and the entire building, and the next ones, are unnecessary, as are the companies which built them, those that built the furnishings, and those who service and clean them.

The offices and staff, the superstructure, overseeing land, banking, technology, and other monopolies waste enormous amounts of wealth. Those monopolies disappear under the full and equal rights of a modern commons replacing exclusive titles to nature’s resources and technologies with conditional titles and through necessities such as health care and retirement addressed in law as a human right and other necessities such as insurance addressed in law as a social right.

If citizens had equality and opportunity, full and equal rights through conditional title to nature’s resources and technologies, instead of daily battles for survival feeding on the fringes of these massive monopolies, family trauma would decline rapidly, fewer children would be abused and neglected, and crime would shrink to almost non-existence. Universal health care as a human right can shrink costs by half even as those needs are better cared for—proper eating (permaculture) and exercise, along with nurse practitioners can take care of 90% of all medical conditions. Eliminating patent monopolies eliminates 85% of the gambling casinos called stock markets, reduces product costs by 50% (we actually think it is closer to 75%) and that efficiency is crucial for eliminating poverty worldwide. Under full and equal rights provided by the inclusive, bonding, principles of Henry George’s property rights laws, the police, legal structure, and prisons would shrink to a very small fraction of an individualized economy’s size and expense.

Other nations would produce their own food and developed world corporate agriculture would shrink accordingly. Permaculture, a must, would become the norm creating a worldwide Garden of Eden and all the world’s citizens would be more secure. Equities markets—and thus their wasted offices, labor, and other expenses of trading monopoly values—would shrink to a tiny fraction of today’s trades even as entrepreneurs are more easily financed and, measured in labor time, the price of medium-to-high priced consumer products would drop by 50%. Thirty to 60% of the retail industry would disappear as moderate-to-high priced products are shipped from factory warehouses directly to consumers. The arms industry would be history and on and on. Utilizing the potential of the most efficient low frequency WiFi, 85% of the structures and labor of the educational system would be used for other social purposes even as the citizenry are better educated. The world is far richer than we realize; much of our wealth is wasted through the monopoly structures evolving directly from aristocratic exclusive title to nature’s resources and technologies that has been imposed upon the world.

The quality of life rises rapidly even as the hours of employed labor lower. The precipitous drop in GDP measures the previously wasted labor, capital, and resources of a monopolized economy. The GDP then rises as people utilize their new free time to develop their many artistic talents or to simply socialize with friends and family.

The fear during all crises is a ballot box revolution demanding those very rights. The powerbrokers, like the Czars of Russia in 1917, have nowhere to turn. In that crisis almost a century ago, the managers of the Russian state offered to change their government to the inclusive philosophies of Henry George, the property rights laws we are pointing to as having the answers for most economic problems. That 1917 offer was rejected and the Bolsheviks took over.

For their philosophy to be chosen, Georgist philosophers staying only with social collection of resource rents will not be sufficient. Exposing the current waste of 50% of America’s economic efforts and pointing out the possibility of a quality life attainable with only two to three days per week of employed labor, through utilizing Henry George’s mighty economic and financial engines, would catch the world’s attention.

Under a modern commons within Henry George’s philosophy, the just rights of private property are fully protected. Individualism—through social support of the highly talented—and competition is strengthened and money no longer flowing through monopolies to the interceptors of wealth. Society’s production is instead, through the inclusive principles of conditional title to nature’s resources and technologies, distributed relatively equally to all. Through equal sharing of productive jobs, each would have a just claim to his or her proper share and there would be no severe poverty. Under those rules of equality worldwide, the need for wasting wealth on immense military forces and their attendant massive slaughters disappears.

That each has full and equal rights within a monopolized system is a contradiction in terms. The Western system of capitalism, again properly titled monopoly capitalism, is so skewered towards the rights of a powerful minority that it can be mathematically proven, and we prove, only a few will own substantial wealth while the overwhelming share of the citizenry will be poor.

Immediately we will be challenged that our large middle class is proof this statement is an error. But a substantial part of the high standard of living in the West is due to the immense wealth appropriated from the periphery of empire, sometimes through outright theft, the current example of the Iraq war for example, but primarily through inequalities in trade. That wealth is distributed among the citizenry of the imperial centers giving the appearance of an efficient, productive society.

Those owning and working within those monopolies are the world’s brightest and most talented, which is why they reached for and attained those positions. They will unanimously dispute their redundancy even as a few of them finance and guide the enormous propaganda process which protects their excess rights. The gains to society will be enormous when, under a system of full and equal rights with a sharing of productive jobs, those talented and brilliant people would be producing, instead of intercepting, wealth.

By analyzing the forthcoming struggle of those employed in the educational system to retain their current highly respected—but now obsolete—positions and identities, one can understand why and how, as the efficiencies of technology advanced, full and equal rights were historically withheld from the masses. The efficiencies of technology will eliminate those jobs through which their identity, respect, power, wealth, and the needs for every day living had previously been distributed. Those in positions of respect and power destined for elimination quite naturally used their power and wealth to protect their power and wealth. With their living tied to those wasteful arteries of commerce, the citizenry unwittingly defend the system and thus support their own, and others, impoverishment.

Through maximizing the potential of WiFi, both the wealthy and developing worlds can educate their citizens for 5-15% the cost of brick and mortar schools. When discussing this thesis of the enormous wasted labor, capital, and resources with others, they easily understood the waste in all segments of the economy except theirs: “Oh no! Not my job! Our work is necessary.” And a litany of reasons why would pour forth.

What takes place is the instinctive protection of territory within the economy from which one obtains respect, identity, and their living. I have watched teachers and professors bristle at the thought of their replacement by video lectures and documentaries presented by the world’s best teachers to the entire country or even the world. Unless, and until, the current system totally collapses, which it will, monopolies always do, and just as those whose identities and livings are tied to the arteries of commerce in other sectors of the economy destined for shrinkage to a fraction of current capital, labor, and resource needs, neither politicians nor the educational industry will make any serious effort to modernize that, or any other, economic sector.

But when that restructuring to an efficient education system does happen, and we have faith that it will, observe the many beautiful buildings which will be freed for fully productive use. Add those to the idle structures of the financial markets, stock markets (patents), insurance, prisons, and legal industries and one will be awed at the wasted labor, capital, and resources within an economy that is touted as the most efficient in the world.

We must emphasize that the appropriation of others’ wealth and the buying and selling of those unearned capitalized values were never necessary. Analyzing how massive wealth was appropriated from its proper owners illuminates why and how this system of theft evolved. Exclusive title to nature’s resources and technologies gave the owners rights to collect rent, in economic language, rent seeking which is “the extraction of uncompensated value from others through exclusive title [or royalties] for use of what were obviously necessities of life—land and technologies—that nature offers free to all.” Those unearned rents and royalties produce annual profits which are capitalized to a value of 10 to 30 times to become the unearned part of capitalism’s huge blocs of capital which we have documented are inefficient to the extreme. Though there are honest capitalized values, the 40% that are use values created by productive labor and capital, the capitalized values of non-productive monopolies are based upon values appropriated from true producers. There can be no other interpretation, either one has worked productively for one’s wealth or one has appropriated it from others.

The secret of monopoly capitalism turns out to be nothing more than monopolization structured through exclusive titles to nature’s resources and technologies. The values appropriated by those monopolies coalesced into huge blocs of capital which bought and sold those capitalized appropriated values and only gave the appearance of efficiency. That appearance of efficiency was protected by a culture pouring out rationalizations of efficiencies under the current legal-economic structure and by overwhelming any other culture attempting to break out from under those unequal property rights laws. Economic efficiency doubling when those monopolies are eliminated proves these were just rationalizations and justifications. They were not reality.

If you have a slave society, banks would finance buying and selling the capitalized value of slaves but would never finance a slave for any personally conceived endeavor. If you have a monopolized economy, banks will finance the buying and selling of the capitalized values of the wealth they appropriate. In both cases they are financing the theft of wealth produced by others.

Leave monopolies or other methods of theft of what is properly others’ wealth in place and any banking system established would not be efficient. Capital, resources, and labor would still be wasted, the same share of labor’s production would still be appropriated, the few would still be immensely wealthy, and the many would still be impoverished. Thus, before addressing how a modern fractional reserve banking system should operate, we had to address why no banking theory is complete that leaves those monopolies in place.

The expansion of competition along with sharing remaining productive jobs, the logical structure of Henry George’s property rights laws, brings all within the economic system on a relatively equal basis, eliminates the waste of monopolization, and creates an efficient, productive, peaceful society. With work time halved and free time doubled, the arts—music, sculptors, painting, singing, inventions, etc—will expand rapidly.

The unnecessary 60% of the huge blocs of capital within the current monopolized economy represent the unearned wealth from both primary monopolies, exclusive title to nature’s resources and technologies, and secondary monopolies, licenses to provide essential services within a monopoly system.

The instant and costless transposing of those appropriated values bought and sold on the markets into relatively equally-shared use values through restructuring to conditional title to nature’s resources and technologies and providing full and equal rights to citizens—including insurance, universal health care, the legal system, etc—proves that, although they were crucial for operating a monopoly system, the 60% of the blocs of capital currently buying and selling those capitalized appropriated values are the very heart of the inefficiency of monopoly capitalism.

When primary and secondary monopolies are eliminated, use value will determine market value. Under full and equal rights all are reasonably well paid, none receive compensation beyond the value of their mental and physical labors, use values match market values, there would be no inflations or deflations, there is no space for an ethereal world of high finance, and thus there would be no economic collapses, see footnote, p. 30.

Under full and equal rights for all, each sum of money has real value, a true value produced by labor, not a false value created by monopolization or complex derivative values, behind it and that value can be realized at any time by its purchase with the now-sound money.

With no air pockets in the economy, thus full value attainable for all money spent, and assuming insurance protecting against individual or regional disasters, including occasional corruptions, there are no risks of bank failures. With all deposits safe and secure, there is no need for mandated reserves beyond that required to maintain a stable money supply within a modern fractional reserve banking system.

However, the need to maintain financial balance locally, regionally, nationally, and internationally will require the mandated reserve principles of modern fractional reserve banking as addressed in chapter one. Through that now-honest banking system, money will be the efficient accounting of each person’s production and consumption as it was designed to be when first invented using the clay accounting tablets of Sumer 5,000 years ago.

Under full and equal rights guaranteed by the inclusive property rights laws of Henry George’s philosophy and utilizing his mighty economic and financial engines, none would be in poverty. GNP and the average workweek would fall by half or more, even as average living standards rise. Those reductions in GNP will measure the current wasted labor, capital, and resources under exclusive title to nature’s resources and technologies. Eliminate those monopolies through restructuring to conditional titles and the money no longer flows through those low-productivity monopolies to provide a high living to those not producing.

An individualized society with 80% of their waking hours free and each searching for identity would become chaos. A cooperative, communitarian society utilizing the efficiencies of honest precepts of capitalism—providing camaraderie, a sense of belonging, and active life interacting with family and friends as home production and education expanded, yet retaining the efficiencies of money and competition—would thrive. Those who study gangs filling those emotional needs in an individualized society and those experienced in communitarian societies understand this well and we will leave that to be sorted out by these newly-free societies.f

Footnotes

1. Undoubtedly the terms would have been that England, France, other nations in Europe, and Germany would all be free. But Germany’s control of the enormous resources of the former Soviet Union would mean that Germany would be far the stronger nation and may even have equaled America in productive capacity. Back to text
2. General Wesley Clark’s interview on Democracy Now explained that, while America was attacking Afghanistan immediately after 9/11/2001 terrorist attack on the World Trade Center, the order came down through the Pentagon that, in this order, they were going to take out the governments of Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran. Read Naomi Klein’s The Shock Doctrine: The Rise of Disaster Capitalism to understand those plans. Back to text
3. As all nations will be able to purchase those products at that low price, anti-dumping laws will not apply. Back to text
4. Imperialist power is massive. Many governments stay in power only at the behest of those imperial leaders. Under threat of not having access to American banks or markets (sales or purchase), banks all over the world must not do business with any nation America decides to embargo. Those who turn to the Euro will eventually discover those nations have never given up the prerogatives of empire. Corporations of any nation who break that embargo can do no business in the United States. And if all that fails the military is called out. Back to text
5. As we addressed in the banking subchapter, “Accumulation of Capital under Henry George’s inclusive property rights laws” and the information subchapter “Investment and Job Opportunities.” Back to text
6. Eastern cultures have had centuries of experience in this and have designed many ways to peacefully structure that free time. Actually every society has created these social bonding, time-structuring philosophies, some peaceful, some not so peaceful. A peaceful world requires addressing the errors of those not-so-peaceful philosophies. Back to text

Endnotes

1. Edmond Taylor, The Fall of the Dynasties: The Collapse of the Old Order, 1905-1922 (New York: Dorset Press, 1989), chapters 17-19. This author’s Economic Democracy: A Grand Strategy for World Peace and Prosperity, 2nd edition (Fayetteville, PA: The Institute for Economic Democracy), pp 62-63, 102-03. Back to text
2. Ibid Back to text
3. Robert McHugh, “Money Supply versus Interest Rate Policy,” Comer, January 2006, pp 18-19. Back to text

This is a chapter from the book, Money; A Mirror Image Of The Economy. Visit that link for more information about the book.